Finance Act 2017

The Finance Bill published in the wake of the Spring Budget has been passed into law somewhat sooner and shorter than expected.  The PM’s surprise announcement of a ‘snap’ General Election last month brought sudden and unexpected changes, and the Chartered Institute of Taxation (CIOT) has warned it is unlikely to suit good tax policymaking. The CIOT estimates that a Finance Bill usually enjoys two days’ debate in the Commons and up to 20 standing committee sessions, followed by a further two days’ consideration at report stage and third reading. This was simply not going to happen, given Parliament’s limited attention in light of the general election.

The government has now deleted 72 out of 135 clauses, and 18 out of 29 schedules – leaving just 140 pages out of the original 762 ahead of the General Election.

What’s ‘out’ includes:

• Making Tax Digital – provisions for digital reporting and record keeping;
• All corporation tax sections, including:
• New regime for losses, and corresponding anti-avoidance provisions;
• Corporate interest restriction;
• Substantial shareholdings exemption simplification.
• Deemed domicile provisions;
• Restriction of dividend ‘allowance’ to £2,000 from April 2018;
• Calculation of profits of trades and property businesses;
• New trading and property allowances;
• All investment relief provisions – EIS, SEIS, VCT, social, and business investment reliefs;
• Restriction to money purchase annual allowance.

What remains includes:

• Income tax – rates, bands, etc, for 2017/18;
• Corporation tax for the year commencing 1 April 2017;
• Intermediaries (‘IR35’) and the public sector;
• Overseas pensions changes;
• Abolition of employee shareholder regime;
• Disguised remuneration – income provided through third parties;
• Taxation of salary sacrifice arrangements;
• IPT rates and anti-forestalling;
• Alcohol and tobacco products duties;
• Soft drinks industry levy.

Of course, the provisions may simply be resurrected in the likely Summer Budget after the General Election, which with the new Autumn Budget will bring this year's total of Budget speeches to three!